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As the extent of Iran’s military disarray becomes apparent and the regime asks for talks, President Trump prepares to join the war or force a major Iranian concession in a deal.

1. Markets remain relatively quiet, with participants watching the ongoing war between Iran and Israel which has now entered its fifth day. Yesterday saw Israel score major tactical successes through air power which seem to have led to a 90% reduction in Iranian missile fire. The Iranian regime made major threats to inflict massive damage on Tel Aviv but was able to fire fewer than 10 ballistic missiles during the hours of darkness, doing very little damage, although a further barrage this morning of 20 missiles resulted in at least two direct hits in the Tel Aviv region. It seems likely that Israel has been able to significantly suppress the missile fire by the use of air power, although a daylight barrage of 20 missiles achieved at least two direct hits, at least one was clearly targeting a civilian apartment block, similar to earlier strikes.
2. President Trump caused a sensation in the early hours of the morning in the Middle East as he departed early from the G7 to return to the situation room at the White House, as the US seems poised to either join the assault on Iran’s nuclear program. Trump angrily tweeted that Iran cannot be allowed to develop nuclear weapons, mocked Tucker Carlson, one of the major critics of US involvement in the war against Iran’s nuke program and mocked French President Macron for suggesting a ceasefire. Trump has since said he wants a “real end” to Iran’s nuclear enrichment, denying he wants a ceasefire.
3. Only the US military can destroy the crucial Iranian nuclear installation at Fordow with a B2 aircraft and a special bunker buster that can penetrate and destroy up to half a mile underground. It seems as if Israel has more or less destroyed the Natanz facility and damaged several others already.
4. Markets seem to be acknowledging that Israel is likely moving towards a victory, as the price of WTI Crude Oil stabilizes and safe haven assets drop a little. However Trump’s moves over the last hours have seen major US stock market indices lower a little, as this could trigger Iranian attacks on US bases in the region, and possibly lead to disruption of crude oil flow in the Gulf.
5. Silver is rising to get within sight of its long-term high price. Trend traders will likely already be involved here on the long side.
6. The Asian session saw the strongest major currency in the Forex market as the Australian Dollar, while the weakest was the Japanese Yen, although the numbers are relatively insignificant. The major pair EUR/USD remains in a valid long-term bullish trend, and trend traders will be interested to be long here.
7. President Trump agreed a deal with the UK yesterday lowering tariffs on automotive and aerospace imports from 27.5% to 10%. The news seems to have had little effect on the British Pound.